"When things go wrong, as of course they do, we reach for two tools to try to fix them. One tool we reach for is rules, betters ones, more of them. The second tool we reach for is incentives, better ones, more of them. What else after all is there?
"The truth is neither rules nor incentives are enough the do the job.
"And what happens is that as we turn increasingly to rules, rules and incentives may make things better in the short run but they create a downward spiral that makes them worse in the long run. Moral skill is chipped away by an over reliance on rules that deprives us of the opportunity to improvise and learn from our improvisations. And moral will is undermined by an incessant appeal to incentives that destroy our desire to do the right thing. And without intending it by appealing to rules and incentives we are engaging in a war on wisdom."
More and better rules; more and better incentives. What is the alternative. Fewer, better rules; fewer, better incentives. All else being equal, fewer rules are better. This is what I think of when I hear "the government that governs least governs best."
That is why I argued against the cell phone ban while driving. We already have rules to deal with this.
This is why I hate absolute deference to to traffic lights. I know when it is safe and respectful to advance (and I often do advance). The light doesn't. We have rules to deal with a collision should it occur, and rules to deal with endangering the safety of others. All of these are independent of obedience to a traffic control device.
When dynamic unwritten rules spring up from high quality principles the system is organic and intuitive. When there is a rule written for each and every possible outcome, dependant on the occupier of the office of rule maker, the system is chaotic, disintegrated, and painful for its subjects.